The case of Mozambique is that of an emerging destination for Public-Private Partnerships, tapping into such partnerships to spur economic development and bridge infrastructural gaps. With strategic planning and strong legal frameworks in place, Mozambique is bidding to attract huge private investment aimed at upgrading its infrastructure, energy, and mining sectors. This paper presents the current status of PPPs in Mozambique in terms of projects, challenges, and future prospects, trying to attract the attention of possible investors.

Overview of the Mozambique PPP Framework

Key Sectors Benefiting from PPPs

Infrastructure Development

Energy Sector Initiatives

Mining and Natural Resources

Challenges in PPP Implementation

Future Prospects and Recommendations

Data and Statistics to Woo Investors

The institutional framework for PPPs in Mozambique was deeply rooted by the approval of the Law on Public-Private Partnerships, Large Scale Projects, and Business Concessions in 2011 and its revision in 2013, aiming at rationalizing procedures to become investment-friendly. Such a legal basis has made many successful projects implemented in different sectors possible, most of which are laying the ground for future investments.

One critical area of infrastructure development is where PPPs have also stamped their authority. This is the rehabilitation and expansion of the Maputo Port, managed by MPDC. This has created the injection of more than USD1 billion investment in enhancing port capacity and efficiency and is important to the trade and economic growth of Mozambique—360 Mozambique. Other road projects have improved regional connectivity, such as the N4 Toll Road linking Mozambique to South Africa, which boosted economic activities.

Other major infrastructure projects include the Rehabilitation of the Beira Port and the Rehabilitation of the Nacala Corridor Project. Donors and private investors from external markets manage these projects, designed to further strengthen Mozambique’s logistic capabilities and sustain trade routes within the SADC region. On the other hand, the Beira Port Rehabilitation greatly increased cargo-handling capacities, while the Nacala Corridor Project—encompassing both a rail and port component—also improved access to interior regions and neighboring countries like Malawi.

Opportunities that pertain to PPP in Mozambique’s energy sector are ample. The country is characterized by vast natural-gas reserves; for example, the Rovuma LNG Project attracted investments of more than $20 billion. This will place Mozambique among large LNG exporters through a venture between Mozambique and international energy giants such as ExxonMobil and Eni. The Sasol natural gas project with its pipeline infrastructure is yet another example of successful PPP models in this sector.

Apart from natural gas, Mozambique is also pushing for the implementation of renewable energy projects. Metoro Solar Power Plant is a PPP project between the Mozambican government and the French Energy Company Neoen that aims to generate 41 MW of solar power in line with the government’s plans toward investing in more renewable energy capacity. This typifies very well a kind of project meant to support energy mix diversification by reducing dependence on fossil fuels, a fact quite relevant for encouraging sustainable development.

Indeed, Mozambique’s mining sector has also remained a beneficiary of PPPs, specifically in the production of coal and aluminum. These include the Moatize coal mine in Tete province that is handled by Vale, while the Mozal aluminum smelter is handled between South African investors. It is through this cooperation that billions in foreign direct investment have been attracted to these projects and increased the boom of the local economy, as depicted from the Commonwealth Governance and World Bank PPP. For instance, roughly $2 billion has been invested in the coal mine; it has created thousands of job opportunities and millions in government revenues.

Another example of a successful PPP in the mining sector is the heavy sands project in Moma, operated by Kenmare Resources. Also, titanium minerals extracted and processed by this project add to the export revenue streams of Mozambique. Further exploration projects in Cabo Delgado have identified substantial deposits of rubies and graphite, attracting further investments into the region and thus placing Mozambique as a very premier global mining destination according to the World Bank PPP.

Notwithstanding the successes, Mozambique has its fair share of challenges in implementing PPPs. There are concerns over transparency and accountability, notwithstanding bureaucratic delays and regulatory hurdles. This has seen the government engaged in improving transparency through measures that can build investor confidence. Also necessary is developing more capacity within the public institutions to have equitable management and negotiation of PPP agreements in order to retain investor interest.

The next challenge is socio-political instability in some areas, scaring away investment. For example, the Cabo Delgado insurgency that went on to a large extent inhibited current and future potential projects. Security and stability are essential to be ensured for securing and maintaining investment in such regions. In this line, the government, in cooperation with international partners, is engineering strategies meant to improve security as well as support to local communities suffering from conflict.

The future of Mozambique in regard to PPPs is very promising, with several opportunities operating in various sectors. Some key recommendations concerning the prospective investor are:

Diversification to New Sectors: Infrastructure and Energy remain strong sectors, but other sectors such as agribusiness, healthcare, and education are untapped PPP opportunities. The World Bank Group has indicated that agribusiness will produce high growth, and thus, the Group prefers more private investment in it by capitalizing on fertile land and a favorable climate.

Strengthening Regulatory Frameworks: Continued improvements in the legal and regulatory environment will enhance investor confidence. The establishment of clear guidelines for mitigation will be very important.

Institutional Capacity Building: Developing public institutions in relation to PPP project management and delivery can result in the success of projects, further enabling an investment climate.

Inclusive Development: Making sure that PPP projects are beneficial to the local communities and contribute toward the socio-economic development of a place, which could be incorporated through CSR initiatives and involvements of local stakeholders during the project planning and implementation process.

• GDP Growth: Steady growth of GDP is experienced in Mozambique, with a forecasted growth rate reaching 4.5% in 2024, largely driven by investments in infrastructure and natural resources.
• Foreign Direct Investment: FDI inflows have been strong, over $25 billion across the past decade into the energy sector alone, according to Commonwealth Governance, IFC PressRoom.
• Generating Employment: Most of the PPP-structured projects created employment opportunities in their thousands, especially within the mining and energy sectors. One such example is the Moatize coal mine, where more than 3,000 workers have been employed, hence developing locally. Commonwealth Governance.

Maputo Port Expansion

This increased the capacity of the port by 40 percent and correspondingly decreased turn-around times, increasing the efficiencies of trade. In excess of $1 billion worth of investment has been poured into the project.

Road Development

The N4 Toll Road project has contributed greatly to the improvement in connectivity between Mozambique and South Africa, facilitating trade and commerce.

Rovuma LNG Project

With over $20 billion of investment, this project is certain to produce 15.2 million tons of LNG annually, thereby elevating the country—Mozambique—to the top position of LNG exporting nations in the world.

Sasol Gas Pipeline

The natural gas project has involved an 865 km pipeline, substantial investment invitation with enhanced energy security in the region. Likelihood (Commonwealth Governance).

Renewable Energy Projects

The Metoro Solar Power Plant is going to help Mozambique achieve its objective, which is specified in the World Bank Public Private Partnership, of increasing renewable energy capacity with production at 41 megawatts of solar power.

Public-Private Partnerships are at the core of Mozambique’s sustainable development. By surmounting the existing austerity and harnessing opportunities cut across sectors, PPPs will play a core role in the economic growth and social transformation of the country. With Mozambique continuing to fine-tune its approach and build on its successes within the sector, PPP looks bright and promising for very key transitions in the nation’s economic landscape.